 Welcome back, it's still ballads 2023 coming to you from PLOS TV Africa as we take a look at another dimension to all of that, specifically looking at the economic impact of the election and of course how it has impacted on the nation's GDP before, now that the elections are run and of course the post-election. I have an economist in the studio here with me, Mokhtar Mohamed, thanks for joining us. Pleasure, thank you. It is indeed a pleasure. I hope you have a great joining us on VIA Zoom, thanks for staying with us, Abraham. Hi, good evening to you and happy election day. Yeah, same to you, I guess I can actually state that. Alright, Mokhtar, let's start with you from here in the studios. Let's talk about the economic impact of all of this, specifically from 2022 when the federal government through the central bank of Nigeria began a whole lot of economic policy and reforms as it were with the cash-night policy. How far would you say that's actually impacted on the election so far? Well, if you look at reports we've been getting, then what the security agencies have been able to do, you could see the reason behind it, which sometimes your program, I say it was more political than economic, we are seeing that because we are beginning to see a lot of people are not coming out, some of them attribute their non-communal because of cash, not giving to them, especially in some part of Nigeria. Had issues where we've seen some people talk, politicians talk to some people and tell them that they don't have cash to transfer to you and they get upset and say they don't trust you people. So definitely I think it has an impact on the election. The unfortunate thing is that the impact also dealt with the ordinary Nigeria before the election, so that also has not done well for the economy. But outside of that, I think it's, we've seen, this is the first election we've seen in terms of good buying, I think it has been minimized, we can't say we've been able to eliminate it in entirety, but I think it has been minimized with not so much talk of where you see them staying in the polling unit, calling people, giving them cash to go out. I think we've been able to reduce that to the BLS minimum, especially in terms of what the politicians resolved towards giving household items, foods, and which they said it was polluted because of the suffering that they are suffering from as a result of the cashless policy, narrow crunch, and unfortunately our governors are doing that and we're opening doing it until security agencies could arrest them. Alright, we'll take the conversation to Zoom also. Abraham, let's get your candid opinion concerning all of that. Visa view, all that transpired economically with the narrow crunch and of course the cashless policy just before we head into the polls today. How far would you say it has impacted voters? Would you say it has been positively or negatively? It is quite clear that the policy in itself caused some political interference in the country because when you look at the CBN's governor and his relationship within the party that he belongs to, knowing that the office of the CBN is sovereign, have its own sovereignty, but though limited to its independence, so it's unclear to me to really be sure what the motives for the cashless policy, particularly the introduction of the new Niren note, albeit it's a fantastic policy, it seems, but it will come across that there are some ambiguity which probably we will know later around that policy. First of all, because of the political interference that we see in the fact that the CBN governor had interest, secondly, there should be a cohesive relationship between the CBN governor and the executive, not to the extent of involvement in an election nearing. So when we come to a point in democracy, in a republic that we have, few weeks to the election or few months to the election that the CBN governor is having content meetings with members of the executive in making policies to determine how the election is run, I have a problem with that approach in itself, but you look at the strength of the policy that this is meant to increase the financial stability in the country. So at this moment, it's meant to be seen and we will see what happens after the election results are announced. If there's any, if they're going to revoke the policy or go back to the Supreme Court judgment, thank you. All right, we'll come back to you, Ibrahim Mugta. Let's talk about the GDP of the nation. By next month, we'll be talking about at the end of the first quarter, looking about looking on the impact this Naira crunches had on banks, specifically, we hear reports of banks being attacked. The ATM terminals were burnt. How much of the impact will you see on the toll of the banks vis-à-vis the first quarter of 2023 GDP? Well, when you look at that, you need to look at how rampant was the attack. I think even if those attacks happened, you realize that it was not as national spread, maybe two or three banks within some states. I think mostly, Ogun streets, I think that's why we have the major incident. For me, it's not so much that affected the bank in terms. When we look at the effect on the bank in terms of the contribution to the GDP, we look at maybe the times that people were not able to get cash. What it would do to the bottom line of some of these banks, maybe when the first quarter result is being released. But fortunately for them, the policy has been good for the bank in terms of their income level. Because when you do this transfer, it reduces, they make more profit, even if you do it from the comfort of your house. So they may not have so much impact in the bottom line of the bank. The only impact it has is that a lot of people were not able to withdraw their cash. A lot of people were not able to go out to do transactions in the informal sector. That's in itself. Don't you think it would actually impact on the financial services sector? Because most people could not really access the bank. It will. Transactions were not. Transactions were not. So it will have impact on the financial sector, especially the informal sector. But for the formal sector, like I said, we've already gotten used with the cashless policy. They have impact in the informal sector and that will reduce the type of patronage in terms of transaction they have with the bank, knowing that most people in the informal sector, some of them did not even have an account. But some of them, again, the positive is that some of them had to start having accounts. They had to have accounts. And sometimes even the trader close to you begins to say, OK, can you transfer it to my account? The film tech guys came to their aid also by giving them some app, even if you have some security challenges with some of those app. So definitely it has its negativity. And that negativity has to do with the informal sector. And the informal sector is the key driver of the Nigeria economy. So definitely when you look at that from that area of the informal sector, it will have a negative impact on the GDP. When you look at it in the short term, the impact that has had in the banking sector, especially in the area of transaction, it has also not gone well for them. But in terms of patronage, in terms of patronage, if you look at what we got from the Nigeria interbank settlement, we've got a person that's gone up to about 70 something percent in terms of the of using a cashless policy. And when you compare some something percent to what we add up to the bank bottom lines, definitely the bank still had some good transaction in terms of the bottom line. But in terms of relationship, in terms of affecting the informal sector, it's going to tell on a GDP. All right, Mugta, we'll come back and talk more concerning this impact of the cashless policy vis-à-vis lots of people now operating using PSP for transactions and all of that. And we saw and we hear reports of our failed transactions. We'll talk about how it has impacted on the banks and, of course, and their technology deployment and all of that. But let me still bring Abraham to this. Let's talk about IAEX and spending so far and what they budgeted for this. If I could just get the graphics on air right now for 2019. And of course, I'm twenty twenty three because so far what we had, I think, budgeted about three hundred and fifty five a billion for the twenty twenty three elections as against what was budgeted for the past election. A whole lot of Nigerians are reacting concerning that. And I school of thought believes that we actually spending so much for elections. Do you think any amount could be too much to to change the pattern of one leadership to the other, Abraham? Well, first, I want to commend my colleague in the studio on his response to the cashless policy he was, you know, spot on on exactly the impacts of that. But I would like to add that as Nigerians will complain about everything, but you have to look at the INEC budget in terms of global standard. And from 2014 as a country, we have been moving from, you know, most of our voting that are just ballot boxes alone into electronic transmissions and electronic voting, you know, a cloud side saving and stuff like that. These things run on a huge budget nationally. But because we we as a people have been complaining since the 1920s, there is nearly nothing that we see good in our government in most cases. So every time and we want to understand this, either it is in America, is in the UK, in France or in Nigeria, you know, public procurement is always very ambiguous and the number are always staggering. So I won't be able to poke the nose because I don't have the detail of what the expenditure on the list of the items or the items on the list of the budget is. But it would not be too far away. Check how much they spend on American election, a country that is already civilized, that has system, that have electricity, that look at how much they spend in all the country that practices the kind of democracy as we run. Our heaven saying that we know that every public procurement, as I believe one of the biggest problems we still have in the country is all the loopholes in the in the procurement act in the country. So there is always room for people to manoeuvre their way in procurement. But we don't need to necessarily begin to criticize INEC. I believe that our INEC, our electionary system, need more funding to get to a point where people can vote from their phone, vote more easily so that we can reduce chaos outside. All right, Mokta, let's get your reaction concerning INEC's budget about over 350 billion euros budgeted this year. For the polls. Like you said, when you look at that again, we are not looking at the exchange rates as per 20. The last time we had election 2019 and today. At that time, the exchange was about 350, 60. They just gone over a week or so. We official, I mean, talking even official, parallel was 350. So now even official, we are doing about 450, about 450, 450, 460. So when you look at that, and knowing that they were using a lot of technology, they would do a lot of purchasing. When you look at the inflation, the figures also have gone high. The things that you bought in 2019, today is over 10 to 15 percent hike in those parts. Sometimes get as high as 70 percent. So definitely I don't think what they spend is so much. People even think that they've not spent so much. If much was given to them, especially in other areas that INEC was also complaining to the National Assembly about. So I don't think there's a challenge with what they've given to them. By and by the kind of result we expect from them. So we start challenging those things when we are not seeing this result commensurate with the amount of money they collected. All right, I still want to talk about payment service providers because in the past few days and a week or so, Nigerians have been moving towards that particular line since most banks' apps and transfers were really failing. Sometimes you do transfers and you don't even get value until after 48 hours. Would you really say this cashless policy has exposed them? How much of technology that we have not fully embraced in the financial services sector? You see, you hit the nail on the nose. I think we've not done that. And I think the banks, too, did not expect it. And the CBN did not carry them along as far as I'm concerned because we know the challenges of even having like about the former sector when you have about maybe 20 to 30 million Nigerian doing transactions. The bank were having challenges with that. And you are not seeing almost everybody will go cashless. We have about 80% of Nigerians going cashless. So you're talking about 100 and something million people at a time wanting to do transactions. The infrastructure is not it won't be enough to carry that. And again, you remember, you know that the banks also are not doing what is done in developed countries, which are shared infrastructure whereby they have a big network whereby all banks come together and build a system whereby each bank can share from it. But what we have here is each bank has to build their own infrastructure. So what I expected the CBN to do was to to to bring the bank together, be the leader, try to say, OK, how can we do some investment in share infrastructure so that we have this cashless policy have a sleepless. It definitely is the way to go. But in our own system, because of the challenges that we have to go and because the banks are not prepared for the volume of transaction, you have to see those downtimes whereby some transaction refused to go. People have to wait till late in the night to do some transaction. So definitely it has to do with the infrastructure. They need to improve the infrastructure. And when you talk about improvement infrastructure, it also comes with expenditures, also comes with funding. And then it's also come with a cost on the customers, too, because banks are going to invest in those infrastructure. So you can be seeing charges at 15 again. If you want to invest in this infrastructure, then you need to there will be charges that will come with it. And sometime again, the CBN or the telecom sectors are not on the same wavelength with the customers and with the bank. Let me give you an example. The best performing cashless policy we have in Africa is in Kenya and where it's been driven largely by the telecom sector. Safareqom, even the rural people, they are using code and it's working very well because there was a partnership between the telecom sector and the banks and also they are on CBN. So definitely we need to look at share infrastructure one that also will begin to look at how we can build a robust financial institution. Not only that, then there should be penalties. If I am doing a transaction because a real transaction is not going, the CBN has a rule that every complaint should be resolved within 48 hours where you go to banks and you tell you there are six working days and no bank has been sanctioned over that. So definitely it's a big challenge. You need to begin to tell bank in developed economy where you go and say, look, I did a transaction. It has not come true. They look at it and even they say, OK, we know what? We do it again for you, let it go. Then we will investigate it. And when they see that, OK, it will be retrieved. So but that also come with his own because everybody knows where everybody is in terms of data, you know where they work, you know their financial status. But in Nigeria also that would be a challenge because somebody can be in Lagos today, tomorrow has moved to Ibadu. Nobody even know his address. So but with the CBN, we could also be able to track that. But I think more we should look at the shared infrastructure. OK, let it bring Abraham again. I just want to find out how it's been able to work in developed countries. You are in Canada and both of transactions are done through wire transfer and, of course, through PSPs and all of that. Looked here, talked about them, shared infrastructure on the parts of telecoms companies and, of course, the banks. How would you say it has been able to work out so well in Canada? What advice can you give? Well, I have lived less than a year in Canada, lived over 20 years in the UK, but anywhere in the world, cashless policy is a very great one. But there are great areas as it regards to Nigeria, how the policy is being implemented. So you will see the world has already gone cashless many years ago. I mean, I learned that from Richard Branson that even in the countries where I live, I really touch the notes and same thing when I'm in Nigeria. I just don't like the physical note. But in terms of its implementation in Nigeria, it's still very difficult because we are still not viable in terms of technology. I was saying that we have the human capital. The human capital resources are there in that we are very intelligent. Aside from India and China, Nigerians are one of the best-taking nation in the world. But between the knowledge pool that we have and implementation, we have a very big gap. And a big example is the E-Nira. If I can digress a little bit into that, the E-Nira policy, when it was made, for example, and it was assigned to a foreign company to develop the app that will, you know, convey that policy. I think that was a little bit poor on the part of Nigeria, on the part of the CBN. I think it is session 39 of the CBN Act that deals in terms of supervision, session 40 deals in terms of the inspection. You talk about when the policy has been made, have we really seen a relationship between CBN and the banks in terms of supervising the technological transformation in management? We call it project change management. And you have to manage the process. You have to manage the implementation of policy. And sometimes you actually give gaps of years for test run. And we have the opportunity because of the economy of scale of our population to not only follow what the world is doing, but to actually take the lead because the human resources are there. The finances are there for us to do so. But in terms of the policy, like I said, with the power of the bank, you know, the sections of the CBN Act, its implementation vis-à-vis its relationship with the banks. There is a huge gap. We are operating in a kind of a system in Nigeria at the moment where CBN is almost operating like a dictator. So you see CBN focuses on session 40. I think it's session 43 for sanction. They just pick banks, they pick financial services and sanction them. But when it comes to their role in session 39 and 40, implementation supervision, they are not very good. So that is a gap. That's an area that the CBN can actually work on to run fast on the deployment of technology for the advantage of the citizens. Hello. Hope you enjoyed the news. Please do subscribe to our YouTube channel and don't forget to hit the notification button so you get notified about fresh news updates.